Cyprus Minister of Finance Kikis Kazamias appeared optimistic that by 15 December Cyprus will adopt a new set of fiscal consolidation measures.
Kazamias participated in the meeting of President of the Republic Demetris Christofias with the head of the main opposition party, DISY, Nicos Anastasiades on Monday, in a bid to reach consensus over a new set of measures that would put the Cypriot public finances on the right track.
Furthermore, the Presidential Palace announced the President will hold a meeting with the leaders of the parliamentary political parties on Friday.
In a brief statement after the meeting, Anastasiades said, ''there is a will for a national understanding.''
He noted that the discussion took place in a positive atmosphere, adding there are convergences on some issues and divergences on others. ''However, I believe there is a will for a national understanding and that's what counts.''
Replying to a question whether Cyprus will avoid the worst scenario, Anastasiades said he believes that Cyprus ''can avoid the worst if we go all the way with determination and boldness.''
''We all should put Cyprus above anything else. I am not interest in who governs, I am interested in the future of Cyprus and that's what counts and I believe that this is what counts for the other political forces as well,'' he concluded.
On his part, Kazamias said a convergence of views emerged from the meeting.
''I would like to express my satisfaction and I hope that by December 8 when I will present the 2012 state budget to the parliament and especially by 15 December when the MPs will vote on the budget, all issues will be settled, so that we will send the right messages both abroad and at home, so that will enter the Christmas holidays on a positive note and to convey this message in the Cypriot market but also to those who watch and evaluate us,'' he said.
Replying to a question that the convergence noted concerns the measures he proposed on November 18, Kazamias said ''the convergence is on the proposed measures with some expressed views, not only by the main opposition party but also from other political parties taken into consideration.''
On November 18, Kazamias introduced an additional set of fiscal consolidation measures, including the freezing of salary increases in the public sector provoking negative reactions by the trade unions.
He said that although he will be in Brussels for the Eurogroup and ECOFIN meetings, negotiations with the trade unions and the employers and industrialists will continue.
''I would once more like to express my optimism which is something more that a cautious one,'' he concluded.
Vice-President of the European Commission Commissioner for Economic and Monetary Affairs and the Euro Olli Rehn said that by December 15 Cyprus must take comprehensive measures that would reduce its budget deficit below the Euro area's 3% benchmark. Otherwise, the European Commission will impose a fine of 0.2% GDP.
The Cypriot House of Representatives has already approved the first fiscal consolidation package on August 27. A second package of measures is incorporated in the 2012 state budget, including a 200 million euro reduction of social transfers. A proposed bill for the increase of the VAT rate from 15 to 17% is pending for approval. If these measures are approved, Cyprus will reduce its budget deficit below the Euro area benchmark and particularly to 2.8% of GDP.
On Friday, November 18, Kazamias proposed a third set of measures including the freezing of salary increases in the public sector (including COLA) for two years, a measure that will save 355 million, a scaled taxation of private employees with a monthly salary of over 2,500 euro and the introduction on a 0.5% levy on the turnover of companies with Cypriot operations for two years.
